[A-List] Venezuela gives Exxon ultimatum

[Henry C.K. Liu]

Finally!

Macdonald Stainsby wrote:

> Venezuela gives Exxon ultimatum
> Dec 20, 2005
> BBC News, Caracas
> By Greg Morsbach
>
> Venezuela has become a key global oil producer
> Venezuela has given the world's biggest oil company, ExxonMobil, until 
> the end of this year to enter a joint venture with the state.
>
> Failure to do so will almost certainly result in Exxon losing its oil 
> field concessions in the country.
>
> Venezuela's socialist government has now signed new agreements with 
> almost all foreign petroleum companies.
>
> After months of pressure from left- wing leader Hugo Chavez most 
> foreign oil firms working there have caved in.
>
> They have agreed to hand over a controlling stake of their oil 
> interests to the Venezuelan state.
>
> This means that Venezuela, which has the world's largest petroleum 
> reserves, now calls the shots in what the foreign guests can and 
> cannot do.
>
> In addition, the companies which have signed the new contracts - such 
> as Chevron, BP, Shell and Total - will in future be presented with 
> much higher tax bills by the government.
>
> Foreign unease
>
> But Venezuela says it is only fair that the foreigners are made to pay 
> up as they have got away lightly in the past.
>
> Much of the oil revenue in Venezuela goes into social projects in 
> shanty towns and poor rural areas.
>
> But the US oil giant, ExxonMobil, is digging in its heels and is so 
> far refusing to agree to the terms of the new deal.
>
> Exxon risks losing Venezuelan operations if it fails to comply.
>
> There is growing unease among foreign energy companies based Latin 
> America that they may be forced to become junior partners by a string 
> of left wing governments.
>
> In the case of Bolivia and the apparent shift to the left there 
> following elections on Sunday, it is possible that the new government 
> will decide to follow Venezuela's example and renegotiate oil and gas 
> contracts with foreign investors.